Don’t. Instead, consider starting a fiscally sponsored project. This approach allows you to test and iterate your idea without the full weight of nonprofit administration. It also allows you to ask, ‘Does the market really need what I’m bringing?’
As part of my series about “individuals and organizations making an important social impact”, I had the pleasure of interviewing Braden Fineberg.
At 23, Braden Fineberg, an engineering intern at Tesla, embarked on a journey that would soon intertwine tech and social impact. His career took a pivotal turn when his mother was diagnosed with a rare lung cancer, prompting him to leave Tesla and care for her. This personal challenge inspired him to become a first-time founder, creating an app that rounded up credit card purchases for charitable donations. Amidst managing his startup and his mother’s health, Braden explored launching a 501(c)(3) organization, aiming to channel family donations into cancer research. This process proved costly and time-consuming, involving extensive legal and accounting expertise to navigate government and IRS documentation. Fourteen months and $14,000 later, as his mother began to recover, Braden discovered fiscal sponsorship — a simpler, more efficient alternative for achieving his charitable goals. This revelation marked a significant turning point, providing him with new insights on helping others launch and grow their philanthropic ambitions.
Thank you so much for doing this with us. Before we begin our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”?
I grew up in Dallas and went to the University of Pennsylvania for college. Although I was an engineering major, I spent a considerable amount of time at Wharton.
My upbringing played a pivotal role in shaping my approach to life and work. Early on, I learned the importance of giving back and to always consider the wider impact of my actions. This mindset guides my career choices and personal goals. I’m constantly motivated by the thought of making a positive difference, continually asking how I can contribute to making the world a better place.
Can you tell us the story behind why you decided to start or join your non nonprofit?
I began my nonprofit journey while working at Tesla. During that time as a fun side project I launched RoundUp App, a donation and fundraising platform for nonprofits, eCommerce and donors. My interest in embedded technology led me to notice a trend: giving at the point of purchase was gaining traction, as seen with Walgreens and CVS through their foundations. It leveraged the insight that consumers wouldn’t mind donating an extra 50 cents on large purchases. This observation sparked the idea of enabling merchants and users to round up their purchases to donate to nonprofits. The concept quickly scaled, involving 12,000 nonprofits and thousands of retailers nationwide, generating tens of millions of dollars in donations.
However, my mother was diagnosed with stage four lung cancer, specifically a rare RET+ mutation. Lung cancer is the leading cause of cancer deaths, accounting for about 1 in 5 of all cancer deaths, and dealing with this while running a nonprofit tech company gave me a unique advantage. I had access to accountants, lawyers and other nonprofit experts right in my office. After nine months and $15,000, I received the IRS designation letter for the Happy Lungs Project, which has since raised millions for RET+ lung cancer research.
This experience, however, also demonstrated the cumbersome process of setting up a nonprofit. Filling out the lengthy 60+ page IRS application was a painstaking task, and dealing with the IRS felt like sending information into a black hole, with no way to track the status of the application. It was during a conversation, two weeks after receiving the IRS letter and while expressing my frustrations about the process, that a colleague mentioned fiscal sponsorship. This was a revelation and made me wonder why I hadn’t known about it sooner.
This experience inspired the creation of Ribbon, the first software product offering a tailored solution for fiscal sponsors. It was born out of the realization there should be a more efficient way for people to support causes they care about without getting bogged down in bureaucratic hurdles. Ribbon is designed to streamline the process, making it easier for others to start and manage their charitable projects.
Can you describe how you or your organization aims to make a significant social impact?
Starting a for-profit business, like a dry cleaner or an ice cream shop, especially in places like Texas where the startup cost can be as low as $300, is straightforward. However, the contrast is stark when it comes to launching a nonprofit, which often involves thousands of dollars and months of effort. To me, this represents societal-level cognitive dissidence, making it challenging to drive social impact and do good in the world.
Ribbon’s mission is to bridge this gap. We support social entrepreneurs, social entities and nonprofits. Our goal is to leave something better for tomorrow than what we have today. We understand the difficulties faced by these organizations, especially when it comes to funding and fiscal sponsorship, which can be hard to obtain. By unlocking philanthropic capital, we enable these entities to access the resources they need.
We draw inspiration from for-profit companies doing good things. For instance, LifeStraw shows how a for-profit can make a significant social impact; Flexport donates shipping containers regularly; and Base Power, one of our customers, contributes by providing batteries to help those in need.
Ultimately, we’re committed to driving better outcomes, not just for investors but for society as a whole.
Without saying any names, can you share a story about an individual who was helped by your idea so far?
Witnessing Ribbon’s positive impact on individuals and communities is extremely fulfilling. We view ourselves as providing the essential tools — the ‘pickaxe and shovel’ — empowering our customers to drive real change.
Seeing our clients like Beloved Garden and Goodnation Foundation use our platform to tackle major social issues is not only inspiring but powerfully validating. Our role is to facilitate and support, allowing users to effectively harness Ribbon to foster tangible social improvements.
Are there three things the community/society/politicians can do to help you address the root of the problem you are trying to solve?
There are three key actions the community, society and politicians can take to address the root of the problem.
The first is educational awareness. It’s crucial to raise the level of understanding about what a nonprofit is and its role in society. Many people have a limited view, thinking of nonprofits only in terms of direct aid, like donating soup. However, nonprofits are designed to operate much like companies, but without stock ownership. Instead of individual shareholders of a company, taxpayers forgo tax revenue in exchange for social good, making you and I “owners” of nonprofits. Society needs to recognize and appreciate that nonprofits are there to provide various forms of help, and this begins with education at a high level.
The second is accepting the nonprofit lifecycle. We should embrace the non-standard perspective that nonprofits have a lifecycle and, generally, should have an endpoint. Just as a company is established to achieve specific goals, a nonprofit should be seen in a similar light. It’s established to solve a problem or achieve a goal. Once that is done, it’s okay for the nonprofit to conclude its operations. This approach can lead to more dynamic and goal-oriented nonprofits, rather than perpetuating their existence without clear objectives. This perspective leads to more focused and impactful work, ensuring resources are used effectively to address societal problems.
The third is facilitating access to philanthropic capital. Speeding up access is essential. Currently, the process can be slow and cumbersome, hindering the ability of nonprofits to respond swiftly to societal needs.
How do you define “Leadership”? Can you explain what you mean or give an example?
I define leadership as the relentless pursuit of a goal with a capable team, underpinned by honesty and inspiration towards a common objective. It’s about being candid in assessing the strengths and weaknesses of both oneself and the team. A good leader excels in transparency, understanding how to leverage strengths and effectively address weaknesses. This ability is their single greatest strength, pushing the team beyond what they thought possible.
Leadership is not just about setting expectations; it’s about setting the right expectations. It’s important to recognize that expecting a fish to climb a tree is a fast track to burnout. It’s not about perceiving limitations negatively, but rather understanding them as positive boundaries to work within. This approach creates a healthy, productive environment where each team member’s unique skills are valued and utilized.
Taking inspiration from Reed Hastings’ approach at Netflix, which contrasts many traditional corporate structures, leadership is about rewarding people for their input. This goes beyond salary and raises. It involves recognition and awareness of each person’s contributions and hiring the right person for the right role. I strongly believe in hiring the right candidate, even at the ‘wrong’ time, as they can elevate the entire team when their moment comes.
I’d much rather have a smaller, cohesive team where everyone knows they deserve to be there, as opposed to a large team where individual contributions can become lost. In a smaller team, each member’s ability to push and drive forward becomes more visible and impactful. This philosophy forms the bedrock of effective leadership, where the focus is on building a team not just for the present, but for the future challenges as well.
Based on your experience, what are the “5 things a person should know before they decide to start a nonprofit.” Please share a story or example for each.
Don’t. Instead, consider starting a fiscally sponsored project. This approach allows you to test and iterate your idea without the full weight of nonprofit administration. It also allows you to ask, ‘Does the market really need what I’m bringing?’
Starting a nonprofit requires more than noble intentions. It demands strategic planning and a clear understanding of the competitive landscape to ensure your mission addresses a unique and necessary gap. Identifying your unique perspective or goal is crucial. Competing in the nonprofit sector involves not just seeking positive results, but maximizing impact and efficiently utilizing human and financial resources.
These steps are indispensable in creating a sustainable and impactful organization.
We are very blessed that very prominent leaders read this column. Is there a person in the world who you would like to talk to, to share the idea behind your non profit? He or she might just see this, especially if we tag them.
I’d choose to speak with Jerome Powell. The reason is rooted in the United States’ unique macroeconomic structure, particularly concerning the tax-deductible nature of donations. The U.S., as a $22 trillion GDP country, stands alone in its approach to tax-deductible donations. This system, shaped by the Federal Reserve and the IRS, offers a platform to restructure and deliver societal-level outcomes that could significantly change our society for the better.
To put things in perspective, the U.S. sees about $600 billion in tax-deductible donations, compared to $12 billion a year from the U.K., the next most “philanthropic” country in the world. This disparity highlights an opportunity to think differently about a structure unique to the U.S. By leveraging this system as a partner to governmental and social services, we have the flexibility to get it right.
This unique approach dates back to IRS Code changes, emerging out of World War II, that eventually became IRS Code 170, creating the 501(c)3 structure we all know now. Unlike other Allied Powers who rebuilt through government-led initiatives, the U.S. chose a free-market approach, incentivizing private donations to nonprofits with tax breaks.
In a country where tax rates are lower than elsewhere — often seen as a place to make money, in contrast to Europe being a place to raise a family — this structure creates market incentives to drive nonprofit activities.
I’d like to discuss with Powell how we intentionally shape this structure. As the only developed country with this setup, there’s a significant opportunity to redefine and optimize this model.
Can you share your favorite “Life Lesson” Quote? How is that relevant to you in your life?
My favorite quote is one from businessman Dan Pena. The quote is, “Maybe wrong, never in doubt.” This resonates with me and parallels my own approach to decision-making in my professional and personal life.
In my role, it’s my responsibility to make the best decision possible with the information available at the time. This quote underscores the importance of decisiveness and conviction. It reminds me that inaction can be a necessary choice, but it should never stem from a desire to procrastinate and instead should be an intentional choice to collect more information. Making a clear and confident decision provides certainty to my team and those relying on me.
This quote also reinforces the idea that our job is to do the best we can at every single moment. It’s not our job to regret but to pivot and adapt as needed. Embracing the possibility of being wrong without being plagued by doubt allows for a more dynamic approach to challenges. It’s about having the confidence to make decisions and the flexibility to adjust when necessary.
How can our readers follow you online?
They can find us at: getribbon.org/, and on LinkedIn at: linkedin.com/company/getribbon/.
This was very meaningful, thank you so much. We wish you only continued success in your mission.
Braden Fineberg Of Ribbon: 5 Things You Need To Know To Successfully Lead A Nonprofit Organization was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.